TCL科技：2023年第三季度报告(英文版)

Stock Code: 000100 Stock Abbr.: TCL TECH. Announcement No.: 2023-063

TCL科技集团股份有限公司TCL Technology Group Corporation

Third Quarter 2023 Report

October 27, 2023

Content

Section I Important Notices and Definitions ...... 3

Section II Key Financial Information ...... 5

Section III Management Discussion and Analysis ...... 7

Section IV Shareholder Information ...... 11

Section V Other Significant Events ...... 13

Section VI Quarterly Financial Statements ...... 14

Section I Important Notices and Definitions

The Board of Directors (or the “Board”), the Supervisory Committee, directors, supervisors andsenior management of TCL Technology Group Corporation (hereinafter referred to as the “Company”)hereby guarantee that this quarterly report is factual, accurate and complete, and shall be jointly andseverally liable for any misrepresentations, misleading statements, or material omissions therein.Mr. Li Dongsheng, the Chairman of the Board, Ms. Li Jian, the person-in-charge of financialaffairs (Chief Financial Officer), and Ms. Jing Chunmei, the person-in-charge of the financialdepartment, hereby guarantee that the financial statements carried in this Report are factual, accurate,and complete.The future plans, development strategies or other forward-looking statements mentioned in thisReport shall NOT be considered as promises of the Company to investors. Therefore, investors arekindly reminded to pay attention to possible investment risks.This Report has not been audited. This Report has been prepared in both Chinese and English.Should there be any discrepancies or misunderstandings between the two versions, the Chineseversion shall prevail.

Definitions

Section II Key Financial Information(I) Key accounting data and financial indicatorsIndicate whether there is any retrospectively adjusted or restated datum in the table below?Yes □ NoEarnings per share in the third quarter of 2022 were adjusted due to the conversion of capital reserve into share capital during the Reporting Period

Note: The Company converted capital reserve into share capital in May 2023, at a rate of 1 share for every ten shares to all shareholders. The Company recalculated the basic earnings per shareand the diluted earnings per share for FY2022 in accordance with accounting standards and other regulations.

(II) Non-recurring profit and loss items and amounts

?Applicable □ Not applicable

Unit: RMB

Details of other profit and loss items that meet the definition of non-recurring profits and losses:

□ Applicable ?Not applicable

The Company has no other profit and loss items that meet the definition of non-recurring profits and losses.Notes on non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on Information Disclosurefor Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define Recurring Gain/Loss items

□ Applicable ?Not applicable

The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit andloss items.

(III) Changes of key accounting data and financial indicators and reasons therefor

?Applicable □ Not applicable

Unit: RMB

Section III Management Discussion and AnalysisThe global economic growth rate slowed down this year, being influenced by such factors asintensifying geopolitical tensions, stubbornly high inflation, and tightening policies adopted bycertain economies to address inflation. In the face of such a complex and challenging externalenvironment, the Company focused on two core industries of display and new energy photovoltaic,so as to strengthen operational resilience and optimize business strategies in pursuit of sustainableand high-quality development. From January to September 2023, the Company achieved an operatingrevenue of RMB133.1 billion, up 5.2% year on year; net profits of RMB5.57 billion, up 185% yearon year; net profit attributable to shareholders of the listed company of RMB1.61 billion, up 474%year on year; and net operating cash flow of RMB16.14 billion.As the international relocation of display production capacity gradually drew to an end, thecompetitive landscape of display industry had leveled out. The industry had returned to a stage oforderly development based on reasonable business returns, and enterprises continuously optimizedtheir business strategies to promote the gradual recovery of the industry. During the Reporting Period,display industry enjoyed a stable supply and demand relationship, large-sized display products drovethe area of demand increase steady and the prices of mainstream products, such as TV panels, againrose to the range of profitability. The Company continued to upscale its products, and furtheroptimized its business structure. In the third quarter, the display business recorded a revenue ofRMB25.68 billion, net profit of RMB1.82 billion, accompanied by vastly improved profitability.With the structural transformation of global energy, the Company’s new energy photovoltaicbusiness continued to consolidate its leading advantages in both technologies and intelligentmanufacturing, improved its synergistic role in congruence with the industry chain, pro-activelyexpanded its global presence, and achieved robust growth in both scale and performance ofproduction and sales. During the Reporting Period, TZE registered an operating revenue ofRMB48.65 billion and net profit of RMB6.58 billion, up 19.9% year on year.Display BusinessDuring the Reporting Period, the end-user demand for display maintained stability amidfluctuation, manifested a trend of seasonal improvement, while the popularity of larger-sized TVs

continued to drive growth in demand areas. The ever-improving supply-side landscape had furthergalvanized the healthy development of the industry, and catalyzed the uptick in prices of large-sizedpanels at the beginning of this March. The prices of small and medium-sized panels graduallystabilized. Driven by downstream new product launches and stockpiling, small-sized panels sufferedfrom structural capacity shortages in the third quarter which led to product price increases.

TCL CSOT maintained healthy inventory through flexible production scheduling strategies,expedited operational turnover, and consistently improved its business and product structure. Risingproduct prices also evidenced the improvement of quarter-on-quarter operational performance. In thefirst three quarters of 2023, the display business achieved an revenue of RMB61.2 billion, up by 17.5%year on year, including revenue of RMB25.68 billion in the third quarter, represented an increase of

73.0% year on year, or 25.8% quarter on quarter; and achieved net profit of RMB1.82 billion, turnedlosses into gains in the third quarter and resulted in both YoY and QoQ growth.

In large-sized segment, TCL CSOT had taken full advantages of the high-generation productionlines, and led the industry by its large-sized panels. TCL CSOT consolidated its top 2 position in theglobal market share of TV panels. TCL CSOT’s proportion of shipping area of TV products withsizes of 55 inches and above had increased to 79%, while the market share of 55-inch and 75-inchproducts ranked first in the world, the market share of 65-inch products ranked second in the world.In commercial markets such as interactive whiteboards, digital signage, and splicing screens, TCLCSOT ranked among the top three in terms of global market share. In its medium-sized productsbusiness, the t9 production line successfully achieved a capacity increase, with expanding marketshare, and the Company continued to optimize the layout of its product and customer structure. TheCompany’s shipment of monitors jumped to a ranking of third in the world, with e-sports monitorsoccupied the largest percentage of market share worldwide. Products for laptops and vehicle-mounteddevices were introduced to major brands worldwide at an accelerated rate. In its small-sized productsbusiness, the Company consolidated its competitiveness through technological innovation. TheCompany ranked among the top three in the world in terms of LTPS mobile panel shipments. The G6LTPS production line was expanded as planned to meet demands for multi-purpose products. Theutilization of the t4 flexible OLED production line was significantly improved, with increasing sharesof high-end products. In the third quarter, the Company ascended to fourth place globally in terms ofmarket share for flexible OLED.

Looking ahead into the fourth quarter, with further improvements in the competitive landscapeand new development trends based on reasonable business returns, the display industry will maintainsupply-demand balance as well as developing in a long-term, orderly, and healthy manner. The pricesof large-sized display products are subject to a moderate degree of seasonal variation. The prices ofmedium-sized products have stabilized, while small-sized products see a higher utilization rate andrising prices in certain areas because of demands for new products. The Company is confident thatits display business will continue to operate steady in the fourth quarter.

New Energy Photovoltaics Business

In the first three quarters of 2023, the photovoltaics industry witnessed intensifying competitionin key sectors, drove prices downward throughout the industrial chain. Be that as it may, the economicviability of photovoltaic power generation improved, impelled a steady increase in installationcapacity at the terminal end. The photovoltaic industry would return to technological innovation andmanufacturing prowess in terms of core competitiveness. TZE gave full play to its rights of defining,benchmarking, and pricing through the improvement of technologies and manufacturing,consolidated its leading position in the market and achieved steady performance growth. During theReporting Period, TZE registered an operating revenue of RMB48.65 billion and net profit ofRMB6.58 billion, up 19.9% year on year.

The production capacity of G12 and N-type photovoltaic materials continued to increase. TZEenhanced the layout of TOPCON cells and shingled modules, and strengthened its differentiatedcompetitiveness. During the Reporting Period, the Company’s production and sales of photovoltaicmaterials rose by 68% year on year, with G12 silicon wafers occupied the largest share of the globalmarket, while N-type silicon wafers also secured pole position in terms of market share of sales. TheCompany led the upgrade of large-sized, thin-slice, thin-line process technologies for crystals andwafers. The Company excelled in metrics such as the monthly crystal output per furnace, volume ofwafer output per kg, and significantly enhanced its leadership position in terms of cost management.To improve industrial synergy, the Company built a demonstration production line for G12 cells withannual output of 2GW in the Jiangsu province, and invested in and constructed an intelligent 25GWN-type TOPCON plant for solar power cells, expedited the development of shingled module projects.

By virtue of the capability of the Industry 4.0 technology in flexible manufacturing and the

strategic partnership with the international community, TZE accelerated to deploy a layout in theglobal commercial market. Having relied on long-term investment and development in smartmanufacturing over the years, the Company had applied Industry 4.0 flexible manufacturing invarious industries, created autonomously coordinated and highly efficient dark factories, whichenabled the Company to achieve industry-leading productivity, with a competitive advantage inlocalized manufacturing on a global scale. The Company signed the Joint Development Agreementwith Vision Industries Company, with a view to jointly investing in and establishing a photovoltaiccrystal and wafer factory in Saudi Arabia with a designed capacity of 20GW in its first phase. Givento Maxeon's intellectual properties and technology advantages in IBC cell-modules and shingledmodules, the Company and Maxeon had achieved mutually reinforced and coordinated developmentin terms of production and channels globally. These efforts will further accelerate the future growthof the Company’s overseas business.

Looking ahead to the future, the display industry has entered a new phase of development amida reshaped competitive landscape. By continuously developing its capabilities in response to demandfluctuations, the Company is expecting consistently improving returns on its display business. TZEwill continue to take advantage of its leading position in terms of G12 and N-type strategic products,intensify the synergistic expansion of modules and cells, and actively expand its internationalbusiness. Under such a backdrop, the Company's new energy photovoltaic business will experiencerobust growth. The Company will seize opportunities from manufacturing upgrades and global cleanenergy transformation, continue to implement its business strategy of “improving operational qualityand efficiency, enhancing strengths to shore up weaknesses, innovation-driven development as wellas accelerating global expansion” to achieve sustainable and high-quality development, and turn itselfinto a global leader.

Section IV Shareholder Information(I) Table of the total number of ordinary shareholders and the number of preferred shareholders withresumed voting rights as well as the shareholdings of the top 10 shareholders

Unit: Share

(II) Total number of preferred shareholders and shareholdings of the top 10 preferred shareholders

□ Applicable ?Not applicable

Section V Other Significant Events

1. Derivative investment for hedging purposes during the reporting period

Unit: RMB'0,000

2. Other Significant Events During the Reporting Period

□ Applicable ?Not Applicable

Section VI Quarterly Financial Statements

(I) Financial statements

1. Consolidated Balance Sheet

Prepared by: TCL Technology Group Corporation

Unit: RMB

2. Consolidated Income Statement from the Beginning of the Year to the End of the Reporting Period

Unit: RMB

3. Consolidated Cash Flow Statement from the Beginning of the Year to the End of the Reporting Period

Unit: RMB

(II) Adjustments to financial statement items at the beginning of the year of the firstimplementation of the new accounting standards which have been implemented since 2023

□ Applicable ?Not Applicable

(III) Auditor’s ReportWhether the Third Quarter Report has been audited or not?

□Yes ?No

The Company’s Third Quarter Report has not yet been audited.

TCL Technology Group Corporation

Board of Directors

October 27, 2023